Creating a low carbon energy system

As we work towards a fossil-free future we hear from Ken Cronin, CEO UKIFDA, with his latest thoughts on the sector. 

Ken's Corner February

“With just a few weeks to go to our first face-to-face EXPO since July 2019, the world feels just as discombobulated as it did in those early days of the pandemic. 

“Words like unprecedented, historic, extraordinary, unparalleled have all been used to describe the last few months in our industry. I am still too new to really comment. Certainly, on the one hand we are in unchartered territory. On the other, we are actually facing the same fundamental challenges we have known are there for years.  

Security and affordability

“How do you create an energy system that is low carbon, affordable, reliable and secure? At present, affordability and security are at the forefront but reliability and carbon intensity are still equally important factors. 

“As I write, weaning ourselves off Russian oil and gas is the topic of conversation. Industry commentators are in overdrive extolling the virtues of their own chosen technology and deriding the competition – at UKIFDA we take a slightly different approach, which is to try and put ourselves in the shoes of the customer – what can we do to help them meet their energy-related challenges? This is why we have spent time and resource demonstrating across the country that renewable liquid fuels such as HVO work as a direct replacement for heating oil without technical issues. And, that the logistics for a wider roll out can easily be put in place.  

“Going direct to our customers has been crucial and creating the Future Ready Fuel initiative in collaboration with our industry partner, OFTEC has allowed us to make this happen. It is vital that customers get the right information in a format that they find accessible.  

The customer is key

“It is also recognised that other technologies will need to play their part and that the cost to the consumer is the key determinant. Affordability was top of the political agenda before the appalling situation in Ukraine pushed wholesale heating oil prices up by over 100%. But it is important to put this into context. Prices over the last 10 years have fluctuated between 55p and 70p per litre and were significantly lower during the pandemic (30p) when aviation fuel demand dropped.  

“UKIFDA members collect heating oil from refineries almost daily. In the first 10 days of the invasion prices were increasing on average 5p per litre per day, making it almost impossible to price the product to the consumer. With customers in mind, our members are working hard to provide the best service and price. Most customers have at least four distributors in their area as well as online options and our advice continues to be the same. We recommend they contact each regularly for a simple price comparison and plan ahead wherever they can. 

“But this historic context is important. Our market of over 100 distributors has and continues to offer customers a highly competitive choice. The price paid in January 2022, just ahead of the Ukraine issues, was virtually the same as that in July 2011 – few if any commodities can say the same. 

“Heating oil is still one of the most competitive sources of heating. This needs to be taken into consideration when we plan for the future.”